The existing extensive domestic sewage discharge methods and simple sewage pipe network collection modes in rural China not only cannot guarantee high sewage collection efficiency, but also fail to achieve rain and sewage diversion, resulting in the deterioration of living environment, the serious pollution of surface water and groundwater in rural areas, and even directly threatening the quality of the water environment. Therefore, accelerating the researches on rural domestic sewage treatment technologies and the scientific and effective treatment of rural domestic sewage as much as possible is a very important task at present, which is of great significance to the overall improvement of China’s rural environment. Therefore, on the basis of summarizing and analyzing previous research works, taking a town in Xuzhou City, Jiangsu Province, China as an example, this paper expounds the research status of rural domestic sewage treatment and its significance in improving rural environment, elaborates the development background, current status and future challenges of rural domestic sewage treatment technologies, introduces the related works of other scholars and the research area of this paper, analyzes the systematic mode of ecological treatment of rural domestic sewage, proposes the systematic mode of biological treatment of rural domestic sewage, conducts technological mode analysis of rural domestic sewage treatment, implements the effect evaluation of rural domestic sewage treatment, describes the impact of domestic sewage treatment on rural environment indicators, explores the improvement of the rural environment by domestic sewage treatment, discusses the applicability evaluation of different rural domestic sewage treatment technologies, and finally performs the quantitative description of the effect of domestic sewage treatment on the improvement of rural environment. The study results show that In the town of Xuzhou City, part of the mixed sewage is absorbed by the remediation plants, and part of the pollutants in the process of infiltrating the subsoil are intercepted by the soil medium, or absorbed, utilized or fixed by the roots of the remediation plants, or transformed by the microorganisms in the soil, and degraded into non-toxic or low-toxic components. The integrated technology refers to the small and medium-sized sewage treatment device developed by combining the pretreatment, secondary and advanced treatment technologies of rural domestic sewage, which is an important development direction of rural domestic sewage decentralized treatment technology. The study results in this paper provide a reference for further researches on treatment and technology of domestic sewage for improvement of rural environment in China.